Wesfarmers (ASX:WES) has agreed to divest the Homebase business in the United Kingdom and Ireland to a company associated with Hilco Capital.
Under the terms of the agreement, the buyer will acquire all Homebase assets.
The 24 Bunnings pilot stores will convert to the Homebase brand promptly following completion.
Wesfarmers will participate in a value share mechanism whereby it would be entitled to 20 per cent of any equity distributions from the business.
Wesfarmers advises that it expects to record a loss on disposal of £200 million to £230 million in the Group’s 2018 full-year financial results, subject to completion and review by Ernst & Young.
The divestment is expected to be completed by 30 June 2018.
Shares in Wesfarmers (ASX:WES) are trading 0.19 per cent higher at $45.20.